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Technology Stocks : Semtech (Nasdaq:SMTC) -- Ignore unavailable to you. Want to Upgrade?

To: John Morrison who wrote (936)	12/7/1999 2:54:00 AM
From: Jeff Bond	Read Replies (2) \| Respond to of 1225

I've notince something worth considering, actually a few things come to mind: 1. SMTC always takes advantage of "pooling of interest" accounting when making an acquisition. This is smart business, since it offers greater flexibility when merging the two companies on paper. Traditional mergers are bound by many conditions that can be ignored when "pooling" SMTC pooled when acquiring Acapella and Edge; SMTC's accounting and financial staff obviously understand quite well the benefits of pooling. I remember at least a year ago there was serious talk about eliminating pooling, since many companies were stretching the rules to the limit. Concerns were raised that companies were making acquisitions not necesarily based on sound financial reasons, but rather the flexibility afforded in pooling made many otherwise unsound merger candidates suddenly appear attractive. 2. Pooling comes with one disadvantage (not in the case of SMTC, they know exactly how to work this), after a pooling merger, the newly formed company is usually restriced for a period of 1-2 yeas before they can effect a stock split. Looking back, its easy to see savvy strategic decisions are a normal part of business for SMTC, based on the pattern of stock splits being closely followed by an acquisition. I am almost redy to conclude that you can bank on an acquisition soon after SMTC splits their stock. At their current pace, this amounts to inhaling another gem about every 1 1/2 to 2 years. I wonder if they split the stock first to facilitate the acquisition, or if they make the acquisition soon after the split because that is the most logical time to do it? Right after you've split your stock is a great time for pooling, since there is no reason you would split the stock right after you had just split the stock, which in effect makes the restriction splits after pooling a moot point. Smart business. 3. Another good acquisition. Great company, superior technology, no impact on Q4 numbers, spare shares and a one-time charge applied to Q4 completes the deal, and SMTC gets top dollar for shares being exchanged. This one went very well for the company methinks. As an aside, without knowing any of the details, I think I now have my answer as to why SMTC may have suddenly cancelled the stock buyback program. It was most likely done to facilitate this acquisition, I bet they worked their tails off this weekend drawing up the details. Jesus, cancel the buyback Friday after close, and wrap up the final details of a pooling the next business day. Pretty amazing stuff, there is no denying SMTC is very light on their feet. 4. Another acquisition with no adverse effects on future operations, that is equivalent to free growth on the top line. SMTC just sucked up USAR with one big gulp, and it didn't let out a singe financial burp in doing so. <CROWD: This is a perfect time to stand up, put your hands together, and give SMTC a great big hand>. Well, at least we know a few things for certain now, SMTC will most likely not be splitting their stock any time soon, they may have to go look for a larger bank, and once again SMTC broadens their market with no impact on financials. Regards, JB P.S. Seen any block trades go through lately?